The summer of 2004...

The Terrorism Risk Insurance business is on the rise according to a recent Marsh Report on Terrorism Risk. The percentage of policy holders who buy terror coverage increased from 44% to 46% by midyear.

In November 2002, President Bush signed the Terrorism Risk Insurance Act (TRIA) into law. TRIA made it illegal for providers of property & casualty (P&C) insurance to exclude terrorism coverage in their policies. Still, the act did not specify how much insurers could charge for the coverage, and as a result, the price for TRIA coverage varied greatly.

The summer of 2004 will continue to be a prime window for the “What if” discussions of potential terrorist attacks on United States assets located domestically or abroad. It is important to remember several key items as we move into more proactive, preventive and preparedness modes within our global organizations and U.S. based business communities.

The soft targets for these catastrophic plans by our terrorist enemies will continue to focus on the places, events and structures that will provide the most impact, both in loss of life and the long-term economic impact. Based on analysis by RMS in their latest Catastrophe, Injury and Insurance study, the study looks at those cities with the highest density of population at 2:00PM. In the RMS report, New York, Chicago and Washington DC are the top three cities in the US for potential impact of a terrorist incident. San Francisco, Boston, Philadelphia and Los Angeles are next in the line up of populations that are the highest density within several miles of the city center.

The five factors for anti-terrorism threat analysis are Existence, Capability, History, Intention and Targeting. Further defined as follows:

1. Who is hostile to the asset?
2. What tools/weapons have been used in carrying out past attacks?
3. What has the threat element done in the past and how many times?
4. What does the potential threat element or aggressor hope to achieve?
5. Do we know if an aggressor is performing surveillance on our building / asset?

When answering these questions for your particular building, city, business park or community you should keep in mind the goal of our attackers. They want to do the most harm to the most number of people for the longest period of time. While we may not be able to totally prevent a planned incident from happening, we can reduce the impact on our personnel, property and business operations.